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Indian tourism and hospitality industry upset over exclusion from stimulus package

Published on : Tuesday, May 19, 2020

The Indian tourism and hospitality industry strongly reacted after 10 weeks of constant discussion with the government, as no announcements were made in support of tourism.

The Federation of Associations in Indian Tourism and Hospitality (FAITH) said that it is aiming towards a deep set of survival measures for tourism from the Rs. 20 lakh crore package announced.

The federation went into a state of disbelief and shock with its concerns not addressed. FAITH members said that the Indian tourism, travel and hospitality industry impacts almost 10% of GDP directly or indirectly.

Jai Bhatia, Vice President, Travel Agents Association of India, a FAITH member organization, said that they have noted over the last two months that not one relief or urgent survival support has been provided to the travel agents and tour operators.

“The feeling is that the government has abandoned our sector, which is one of the largest revenue earners in the country, be it in terms of income tax, GST, or foreign exchange. Ours is a service sector and we promote travel and tourism across the world with a focus on India. Due to the lockdown, we are hit the most with air borders being sealed by India and no foreign or domestic travel being permitted,” Bhatia said.

FAITH said in a statement that it has already witnessed over one quarter of accumulated losses which started from February onwards. “There is no cash inflow expected for many quarters over FY 20-21 as the key segments of the Indian tourism economy will be down,” organization said.

“Domestic travel and corporate travel within the country may slightly ease up post lockdown but will be highly restricted due to fear of travel among elders and children, the new physical distancing norms, corporate travel freeze and the closure of the holiday season which will impact all leisure, adventure, heritage, spiritual, cruise and niche tourism segments,” Reji Philip, a south Mumbai-based travel agent said.

All tourism service providers, the hotels, travel agents, tour operators tourist transporters, restaurants, guides will be compromised and the tourism industry of India will have to function in a stringent fashion, making most tourism businesses unviable on a cash operating basis.

“The proposed MSME fund with its many underlying restrictions may have a very limited usage,” FAITH’s 10-member association said. Indian tourism, travel and hospitality impacts 10-12 % of India’s employment, which is believed to cover almost 5 crore plus direct and indirect jobs.